The euro zone banks index fell 1.1 per cent. Natixis gained 0.4 per cent, however, on the back of higher profits for the period.

Standard Chartered also fell more than 6 per cent as the bank dashed investors' hopes of a return to a dividend payout.

Mining firms were the worst-performing, down 1.8 per cent on the back of weaker metals prices and disappointing results.

Rio Tinto was the biggest weight, dropping 2.8 per cent after it reported first half earnings which missed expectations. The firm also announced an interim dividend and an additional US$1 billion share buyback. "We were disappointed at the increased buyback - we would have preferred to see a higher dividend instead," analysts at Shore Capital Markets said in a note.

Results which undershot expectations were being punished more than upbeat earnings were being rewarded, said David Madden, analyst at CMC Markets. "Investors are happy to pounce on negative news and sell negative news, but they're not as keen to go out and buy when the results are good," he said.

Valuations are already high and running above long-term averages, suggesting that good earnings are much less a surprise than earnings disappointments.

Tech stocks turned from a boost to a drag as trading wore on, but Apple suppliers Dialog Semiconductor and AMS held on to gains of 3 and 4 per cent respectively after optimism on future demand for the iPhone lifted Apple shares to a record high overnight.

Well-received earnings boosted shares in gambling firm William Hill, which jumped 6 per cent, while Hugo Boss also enjoyed 6.5 per cent gains after strong results and a return to growth in the U.S. market.

Luxury carmaker Ferrari raced to the bottom of Italy's blue-chip index, down 3.5 per cent as the firm kept its full-year guidance, disappointing investors hoping for it to lift its outlook.

Lufthansa gained 3.2 per cent, the top DAX gainer after well-received results.

Around halfway through the results season, second quarter earnings in Europe are expected to increase 13.4 per cent year on year, or 11.2 per cent excluding the energy sector, according to Thomson Reuters.